Welcoming Address by Lim Guan Eng at Integrity Conference 2009 held at Penang Hard Rock Hotel on Saturday, 5^th December 2009: 

Integrity As Development” approach in Penang has allowed Penang to save hundreds of millions of ringgit, achieve a RM 123 million turnaround in the 2008 Budget(26% of 2008 Budget) 

Ladies and gentlemen.

It gives me great pleasure to welcome you to Penang, especially to Batu Feringghi's Hard Rock Hotel for Penang State government’s inaugural INTEGRITY CONFERENCE 2009. I hope your trip here is productive, enlightening and enjoyable. Please take some time off to relax on this wonderful island and the beautiful hotel and sample our world-famous food.

Special thanks you to our Guests, YB Tan Sri Nor Mohd Yakcob for delivering the keynote address, YB Tuan Guru Dato' Nik Abdul Aziz Nik and YB Lim Kit Siang for their close interest as a participant, YB Datuk Seri Nizar and Y.M Tunku Abdul Aziz Ibrahim for availing themselves this morning. And congratulations to Dato’ Haji Abu Kassim bin Mohamed on his appointment as the new MACC Commissioner.

My appreciation also to the panel speakers and moderators who are in this INTEGRITY CONFERENCE 2009 despite the short notice. It has been a privilege to be able to invite prominent figures in the sometimes lonely field of integrity for this event.

With the theme of ‘Integrity as Development’, we hope to set out on integrity as the key motivating forces in the three key areas that makes development successful, - an efficient civil service, promoting economic growth and strengthening public-private partnership.

Only with integrity can we succeed in our aspirations to transform Penang into International City that is a location of choice for investor, a Destination of choice for tourist, and a Habitat of choice for sustainable living. When we talk of branding Penang, it is branding that is synonymous with quality, reliability, sustainability, safety and integrity.

We believe that integrity is integral to development. The old dogma, unspoken but widely accepted, that corruption is unavoidable and somewhat necessary to drive economic development. In other words one needed the lubricant of corruption to oil the engines of growth. Conventional wisdom in Malaysia used to be that corruption was not important enough an issue to cause governments to fall.

This is no longer true. The world’s population care enough about corruption enough to change and overthrow governments. We have seen that happen not only in Malaysia but also many other countries.

According to the results of a joint survey undertaken by independent pollster Merdeka Centre and press freedom advocacy NGO, Centre for Independent Journalism (CIJ), corruption and abuse of power is number one on the list of problems that respondents think is besetting the country. Eighty-three percent believe that corruption is rampant in Malaysia and should be dealt with soon. However, 74 percent indicated that they are dissatisfied with the way the government is handling the issue, in contrast with the nearly 80% approval rating the Indonesian government's handling of corruption. Perhaps that is why Indonesia has improved in its Corruption Perception Index rankings by Transparency International (TI) this year as compared to Malaysia’s slide from 5.1 points to 4.5 points and No. 47 to 56 this year.

Corruption is one of the key leakages that not only damages the economy directly in terms of losses but also create structural defects in terms of inefficiency loss of productivity, creativity and innovation. However corruption is not only a cancer in the public sector but also the private sector.

The 2009 TI Global Corruption Report estimates that in developing and transition countries alone, companies colluding with corrupt politicians and government officials, have supplied bribes estimated at up to US $40 billion annually. Research in the report also shows that half of international business executives polled estimated that corruption raised project costs by at least 10 per cent resulting in consumers around the world overcharged approximately US $300 billion through almost 300 private international cartels discovered from 1990 to 2005.

Estimates of the cost of corruption in Malaysia vary. Second Finance Minister Datuk Seri Ahmad Husni Hanadzlah admitted to RM 28 billion annually from having closed tenders in government procurement. Time magazine had quoted Daniel Lian, a Southeast Asia economist at Morgan Stanley in Singapore, saying that Malaysia might have lost “as much as US$100 billion since the early 1980s to corruption”.

Having talk so much about corruption, how do we define it. TI again has a focused and simple definition of Corruption is operationally defined as the abuse of entrusted power for private gain.

TI further differentiates between "according to rule" corruption and "against the rule" corruption. Facilitation payments, where a bribe is paid to receive preferential treatment for something that the bribe receiver is required to do by law, constitute the former. The latter, on the other hand, is a bribe paid to obtain services the bribe receiver is prohibited from providing.

In Penang, we have suffered from losses flowing from “against the rule” corruption such as the RM 40 million Tang Hak Ju land scam and the stealing of more than RM 500,000 funds by officials in the Syariah courts. Losses from “according to the rule corruption” may even be higher amounting to hundreds of millions if not billions of ringgit.

The Penang government has adopted CAT principles as our core governance based on competency, accountability and transparency. In line with TI’s requirements we try to ensure that that allows those affected by administrative decisions, business transactions or charitable work to know not only the basic facts and figures but also the mechanisms and processes. For this reason we implemented not only an open tender system but also a 2 week objection period to allow a review if there any valid complaints by unhappy competitors. To further reduce financial temptations we have cut out the “middle men” by disbursing the money into the accounts and practicing electronic tender so that the days of needing “political cable” to secure government contracts are long past and replaced by “computer cables”.

To protect and encourage whistleblowers, an Integrity Award of RM 10,000 was introduced. The first recipient was a Penang Syarie High Court judge, Mohd Yusof who was also awarded a Datoship for exposing a cheating scam of more than RM 500,000.

We have reaped the some benefits from our reforms by having a surplus budgets for 2008 and 2009 despite projected deficits of RM 35 million and RM 39 million respectively. For 2008, we achieved a turnaround of RM 123 million or 26% of the 2008 budget by recording a surplus of RM 88 million instead of a deficit of RM 35 million.

We are honoured that Transparency International Malaysia has commended the success of Penang’s CAT governance. The 2008 Auditor-General’s Report Department of Audit also complimented our prudent financial management and people-centric governance. As for the Star Rating System, Penang Finance Department and Penang Development Corporation were two of the 8 state agencies in Malaysia that received the highest 4 star rating.

However Penang can not do it alone. We need to co-operation and assistance from all stakeholders whether from the Federal and state governments, the enforcement agencies, the private sector and most important of all the people to battle the scourge of corruption and establish integrity as a way of life.

What Malaysians need is a concerted national effort to establish integrity and fight corruption with a coherent framework under cohesive leadership and teamwork. In other words Malaysians need men of integrity. Despite our different political stripes and differences of opinion, I believe we are all men of integrity here.

We want integrity in leadership, management and administration as a platform for every development that we planned. That is why the government developed CAT as our core governance but I am certain there are other methods to be expounded at this conference.

I hope you will have a successful and fruitful deliberation during the conference. I certainly look forward to the presentation by our esteemed speakers and trust that this inaugural conference will benefit all those present here today and will enhance the future development and integrity of Penang and Malaysia. I also hope the discussions and interactions will strengthen friendships among participants and organizers.

I wish to end by quoting the English author Samuel Johnson who said that “integrity without knowledge is weak and useless. Knowledge without integrity is dangerous and dreadful”.

Let us gather the knowledge in this conference to make integrity work for our common good and development. I thereby declare the inaugural Penang INTEGRITY CONFERENCE 2009 officially open.

*Lim Guan Eng, DAP Secretary-General & Penang Chief Minister; Member of Parliament for Bagan